Volume 19 No 3 May-June 2018
Michael Jay Markey, Jr. MRFC Like-Minded Goals
MRFC accredited by NCCA IN THIS ISSUE How to become an
IARFC Biltmore Conference National Financial Plan Competition
MRFC accredited by NCCA Join an elite group of financial consultants education • experience • integrity Contact mrfc@IARFC.org or 800.532.9060
How to become an
• F our years of professional experience as a full-time practitioner in the field of financial planning or financial services. • A n educational requirement which can be satisfied in various ways. • E vidence of having met local licensing requirements for your type of planning services. • D ocumentation of a sound record of business integrity with no suspension or revocation of any professional licenses or designations. • C ompletion of the application in its entirety with application fee. • S ubmission of examination fees. • P ass the MRFC examination with a score of 67% or better.
IARFC INTERNATIONAL ASSOCIATION OF REGISTERED FINANCIAL CONSULTANTS
Founded in 1984, the IARFC’s mission is to serve, educate and train financial practitioners to help their clients wisely “spend, save, invest, insure and plan for the future to achieve financial independence and peace of mind.” www.IARFC.org
MRFC Receives Accreditation NCCA Accreditation Approved for Financial Consulting Designation “With this acceptance, I am excited for our members who can now apply for the MRFC and receive the quality support of the NCCA.” MRFC Board Chairman, Barry L. Dayley, MRFC
NCCA is the accrediting body of the Institute for Credentialing Excellence (formerly the National Organization for Competency Assurance). Since 1977, the NCCA has been accrediting certifying programs based on the highest quality standards in professional certification to ensure the programs adhere to modern standards of practice in the certification industry.
The IARFC has received confirmation from the National Commission for Certifying Agencies (NCCA) that the Master Registered Financial Consultant (MRFC) designation has been granted certification status. This acknowledges that the MRFC program content has been validated by a comprehensive job analysis and scrutinized by industry experts.
“This is great news! We have worked diligently for a number of years to comply with all the regulations necessary to submit our application for review,” related MRFC Board Chairman, Barry L. Dayley, MRFC. “With this acceptance, I am excited for our members who can now apply for the MRFC and receive the quality support of the NCCA.”
According to the NCCA, the MRFC credential has met “recognized national and international credentialing industry standards for development, implementation and maintenance of certification programs. The NCCA Standards were developed to help ensure the health, welfare, and safety of the public. They highlight the essential elements of a high-quality program.”
What this means to the public is a level of confidence when making a decision to engage a financial consultant. The NCCA endorsement of their professional’s background adds a layer of approval not lightly given. In this day of abundant information, the MRFC credential helps make the decision when faced with an overwhelming amount of choices.
What this means to the actual MRFC in the field is that they are now sanctioned by an impartial third party agency. This award of legitimacy elevates the MRFC to a higher level of ethical and practical appeal to the general stakeholder when they choose a financial professional. It is an honor and achievement for members of the Association to reach this level of competence in the areas of experience, ethical behavior, education, examination, and continuing education.
“The MRFC accreditation brings on a new level of importance,” explains IARFC Chairman and CEO H. Stephen Bailey, MRFC. “Currently there are only 8 programs recognized by FINRA on their website. We look forward to adding our MRFC credential to the list.”
ICE’s mission is to advance credentialing through education, standards, research, and advocacy to ensure competence across professions and occupations. NCCA was founded as a commission whose mission is to help ensure the health, welfare, and safety of the public through the accreditation of a variety of certification programs that assess professional competence. NCCA uses a peer review process to: establish accreditation standards; evaluate compliance with these standards; recognize programs which demonstrate compliance; and serve as a resource on quality certification.
For professionals consultant who wish to know more about the MRFC program and submit their application visit IARFC.org.
ICE and NCCA are located at 2025 M Street, N.W., Suite 800, Washington, DC 20036-3309; telephone 202.367.1165 website www.credentialingexcellence.org
The Register | May-June 2018
BOARD OF DIRECTORS Chairman and CEO, H. Stephen Bailey, LUTCF, CEBA, MRFC Vice Chairman, Nicholas A. Royer, RFC® President, Peter J. D’Arruda, MRFC
Director, Michael Jay Markey, Jr., MRFC Director, James B. Moss, CEP®, RFC® Director, Rick B. Stanzione, RFC® Director, Mayo M. Woodward, CRPC®, RFC®
Secretary, Michelle Blair, RFC
Editor-in-Chief Wendy M. Kennedy email@example.com
Director, J. Christopher Dixon, RFC®
INTERNATIONAL LEADERS Asia Chair, Jeffrey Chiew, DBA, CLU, ChFC, CFP®, RFC®
Hong Kong and Macao, Chair, Teresa So, Ph.D., MFP, RFP, FChFP, RFC®
Greater China Chair (China, Hong Kong, Macau & Taiwan), Liang Tien Lung, RFC®
India Deputy Chair, Vijay S. Wadagbalkar, RFC®
China Development Center CEO Kai Yuan Tu Australia and New Zealand Chair, George Flack, CFP®, FIPA, AFAIM, RFC® Hong Kong and Macau Honorary Chair, Samuel W. K. Yung, MH, CFP®, MFP, FChFP, RFC®
Indonesia Chair, Aidil Akbar Madjid, MBA, RFC® Malaysia Chair, Ng Jyi Vei, ChFC, CFP®, RFC® Philippines Chair, Ralph Liew, RFC® Taiwan Chair, Kai Yuan Tu, RFC® Trinidad Chair, Inshan Meahjohn, RFC®
MRFC CERTIFICATION BOARD Barry L. Dayley, CFP , MRFC
Director, Julie Friend
Secretary, Walt Woerheide, Ph.D., ChFC, CFP®, MRFC
Director, Justin Martin, RFC®
Director, Louise Fallica, RFC®
IARFC OFFICE ASSOCIATE TEAM
United States — www.iarfc.org
COO, Charlotte Isbell
China — www.iarfc.cn
Editorial Coordinator, Wendy M. Kennedy
Hong Kong — www.iarfc-hk.org
Membership Services, Vicki Caplinger
India — www.iarfcindia.org Indonesia — www.iarfcindonesia.com Philippines — www.iarfcphilippines.org Taiwan — www.iarfc.org.tw
www.IARFC.org/Register 1046 Summit Drive Middletown, OH 45042-0506 800.532.9060
Membership Services, Judi Nelson Public Relations, Susan M. Cappa Information Technology, Randy Kriner
Editor Susan M. Cappa firstname.lastname@example.org Editorial Advisory Committee Peter J. D’Arruda, MRFC Michelle Blair, RFC® The Register is published by the International Association of Registered Financial Consultants ©2018, It includes articles and advice on technical subjects, economic events, regulatory actions and practice management. The facts and opinions in the IARFC’s Register articles represent their author’s views and are not endorsed by the publisher. The IARFC makes no claim as to accuracy and does not guarantee or endorse any product or service that may be advertised or featured. Articles, comments and letters are welcomed by email to: Wendy M. Kennedy email@example.com Periodicals Postage Paid at Mansfield, Ohio. POSTMASTER: Send address changes to: P.O. Box 42506, Middletown, Ohio 45042-0506 SSN 1556-4045
Advertise The Register reaches 4,000 financial professionals every issue. Register advertising is an easy and cost-effective way to promote your company’s products and services to this dedicated audience. To advertise contact: 309.483.6467 firstname.lastname@example.org www.iarfc.org The Register | May-June 2018
In This ISSUE
Volume 19 No. 3
Register Cover Profile Michael J. Markey, Jr.
MRFC Receives Accreditation
16 Like-Minded Goals
Features 2018 Biltmore Conference 7 Conference 10 National Financial Plan Competition
Are You In A Box? 18 By Michelle Blair
Will Digital Marketing Work For Financial Consultants? 19 By Jorge Villar
5 LinkedIn Steps That Will Double Your Business 22 By Kerry Johnson
How To Be In Front Of Your ‘IDEAL’ Life Insurance Prospects! 23 By Jeremy Nason
Change the Rules of Engagement
1 NCCA Accreditation Approved for Financial Consulting Designation
Chairman’s Desk 6 2018 IARFC Annual Board Meeting By H. Stephen Bailey
Marketing Unplugged 12 Are You Keeping Up With Trends in Digital Marketing? By Bryce Sanders
IARFC News 14 IARFC Revises Requirements for Financial Designations
International News 30 From the Heart, Comes the Passion
Consumer Focus 32 Some Rules are Better Than Others By Peter D’Arruda
IARFC – Viewpoint 34 A Case for Charity By Mayo Woodward
27 By Jay Weinstein
Register Profile: Jeffrey Concepcion Developing Relationships 25 Introduction Susan Cappa
Departments 2 IARFC Domestic and International Directors
4 New IARFC Members and Designees 4 Events Calendar 5 From the Editor
INTERNATIONAL ASSOCIATION OF REGISTERED FINANCIAL CONSULTANTS
The Register | May-June 2018
IARFC INTERNATIONAL ASSOCIATION OF REGISTERED FINANCIAL CONSULTANTS
2019 Conference Nashville
N e w M R F C s, R F C s, R FA , and General Members MRFC
Members Who Recommended Members
Loran S. Coffman, MRFC, MI Barry L. Dayley, MRFC, FL Lisa D. Ford, MRFC, TX Roger S. Green, MRFC, GA Nancy E. Greene, MRFC, NJ Michael R. Henry, MRFC OH James Kotagides, MRFC, OH Pamela K. Mah, MRFC, HI Scott W. Ringland, MRFC, NH Steven R. Sanson, MRFC, PA
Isabel Barrow, RFC® Roger J. Conde, RFC® Isabel Cooper, RFC® Dave Hardin, RFC® Jeremy Nason, RFC® Jon M. Rogers, MRFC Brandon Setlock, RFC®
Member Referrer Recognition
RFC®, RFA®, General Members
Events Calendar 2018 May 30 Stratos Wealth Partners National Meeting — Exhibit May 30 - June 1, 2018 Cleveland, OH June Board of Directors Phone Conference June 12, 2018 July 2018 Brookstone Capital Management National Conference — Exhibit
George N. Acheampong, RFC®, NC Oakley J. Allen, RFC®, KS Kenneth R. Behm, RFC®, WA Stefan A. Chrzanowskí, RFC®, FL Kenney N. Conwell, RFC®, GA Thaddeus J. Derendal, RFC®, SC Matthew J. Dixon, RFC®, SC David Brian Dooley, RFC®, MI Louis C. Ford, RFA®, TX William L. Gaines, RFC®, MD James A. Hopper, RFC®, IN Cathy Hu, RFC®, CA Noah B. Kelsch, RFC®, UT Jeffery W. Kesting, RFC®, TX Jarrett D. Lang, RFC®, OH Gavin Merwin, RFC®, GA Terry A. Moore, RFC®, GA Paul Partridge, RFC®, NJ David Joseph Schall, RFC®, MI Steven G. Schramm RFC®, GA Joseph A. Siragusa, RFC®, NJ Rebecca T. Sizelove, RFA®, TX Ronald L. Stephenson, RFC®, IN Mark C. Trawick, RFC®, GA Henry J. Wieniewitz, RFC®, TN
Brandon Setlock, RFC®
In Memoriam In reverence we would like to remember our passing member(s): Antony Francis, RFC®, Bermuda Chair Danny C. Baird, RFC®, Shreveport, LA Anthony F. Granato, RFC®, Tom Rivers, NJ
July 25-27, 2018 Chicago, IL Money Concepts — Exhibit July 15-19, 2018 Vail, CO September Board of Directors Phone Conference September 18, 2018
Journal of Personal Finance Access the full online version by visiting journalofpersonalfinance.com or by joining the IARFC. Hard and Adobe PDF copies are available to Members and Non-Members: Order today. http://store.iarfc.org/publications.aspx
December Board of Directors Phone Conference December 11, 2018
The Register | May-June 2018
From the EDITOR
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I could hardly catch my breath. We had just finished the IARFC Biltmore Conference and had enjoyed an entertaining dinner at the Village Social restaurant. The IARFC Team, Charlotte Isbell, COO; Susan Cappa, Public Relations; Randy Kriner, IT with his guest Stephanie Henry; our Membership Services, Vicki Caplinger and Judi Nelson along with our Australia Chair, George Flack reflected on the Biltmore Conference. Most all of us had called it a night when our COO, Charlotte decided to take a last look at her office correspondence for the day. She opened an email that stated, the MRFC is accredited by the NCCA from there she called Susan Cappa. Susan knocked on my door, and said, guess what Charlotte has good news. Well what other good news could there be? I practically jumped for joy, well actually I kind of screamed, “the MRFC is accredited.” We all regrouped, at the restaurant, well I actually ran, for a toast, hugs and some tears. The IARFC Team has dedicated ourselves to success of the organization, this is just the first step toward the fulfilling our goals. Congratulations to all of you IARFC designees and members for sticking with us. The MRFC is Accredited by the NCCA.
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Advertising Representative Wendy M. Kennedy, Editorial Coordinator IARFC P.O. Box 506 Middletown, OH 45042 P: 513.261.6047 F: 309.483.2371 email@example.com
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Generation Gap – Between Client and Consultant, Be High-Tech and High-Touch, Be Available 24/7, Be Transparent — Trust is Key, Help First, Sell Second, Support Social Causes. The back, inside front, and inside back covers are available on a first-come, first-served basis. Other positions are also available. Practitioners, academicians and policy makers in financial services rely on the Register as a key source of information to grow and serve their client base. The back cover is $750 and insertion prices decrease from there based on position, size and schedule frequency. Please contact us with questions, for a media kit, or for assistance in developing your customized advertising, exhibit and sponsorship packages. We look forward to hearing from you. The Register | May-June 2018
Chairman’s Desk… 2018 IARFC Annual Board Meeting Life goes on for the IARFC Board. Even though we were all looking ahead to the Biltmore Conference on Wednesday and Thursday April 18-19, the Board and IARFC Team convened on Tuesday, April 17 to a full agenda of Association business. To get primed for a comprehensive day of work, the Board/Team members first enjoyed a personalized tour and wine tasting Monday evening. We then wandered through low stone-walled tunnels ending at the Champagne Cellar of the Biltmore Winery for an “intimate, European atmosphere” type dinner. What a great way to start the conversation flowing. It was good to reconnect in person.
IARFC Board: (L-R starting front row) James B. Moss, H. Stephen Bailey, Michelle K. Blair, Rick B. Stanzione, Mayo M. Woodward, Nicholas A. Royer, Michael Jay Markey, Jr. , Peter J. D’Arruda. Not pictured: J. Christopher Dixon
Bright and early, Board Meeting day covered IARFC business and planning for the future. I am convinced that the Association needs to look to the future and make changes. We cannot keep doing what we did 5, 10, 15 years ago. The focus of time investment has dramatically changed. It is now the next 9:30am to 5pm — not years from now. Just look at some of the tried and true retail stores that are going out of business. If you don’t modify your outlook, you die. If you are living for the future, you are going to make it. I am deeply committed to tracking us for whatever is coming next. The good news is, the Board is in agreement. As a result of this engagement, the Board agreed to a complete By-Laws review and update. Another thing the group decided to rethink is our mission statement. Not change it exactly, but revitalize the message for relevancy to today’s Association. Are we still following the mission of Loren Dunton? Are we poised to meet the future consultant’s needs? Can we articulate a vision that speaks to the future professionals yet resonates with long term members? This and more will be taken into consideration. I am certain education is in our near future. Offering more learning options is on the table with the Education Committee. Discussions are underway regarding different courses to be offered for our members. Thus, the learning continues between the annual in-person events such as we had at the Biltmore. Page 6
Our Board Meeting time was well invested. Ideas flowed, Board and Team members renewed their enthusiasm for the Association and the programs to come. It’s all good. After the conference however, we received the best news of all – our NCCA accreditation application for the MRFC credential was approved. I will address this more formally in Chairman’s desks to come, but wanted to give the Board, Team and those individual members who became MRFCs a great big Thank You for their work and being part of our dedicated journey.
H. Stephen Bailey, “Steve” Bailey, CEBA, LUTCF, MRFC started HB Financial almost 30 years ago after already having a life insurance career. Steve is an the Chair and CEO of the IARFC Board. He is also the 2010 recipient of the prestigious Loren Dunton Memorial Award. When not working with his clients, Steve is on a golf course, spending time with his grandson or traveling with his wife, Bobbi. Contact: 704.563.6844 firstname.lastname@example.org www.iarfc.org The Register | May-June 2018
IARFC INTERNATIONAL ASSOCIATION OF REGISTERED FINANCIAL CONSULTANTS
BILTMORE CONFERENCE April 17 – 19, Biltmore Estate, Asheville, NC
Images used with permission from The Biltmore Company, Asheville, NC
IARFC CE financial consultants nurture relationships through CE personal interactions The Register | May-June 2018
IARFC BILTMORE CONFERENCE
April 17 – 19, 2018, Biltmore Estate, Asheville, NC
international and domestic individuals thanking them for their representation of the IARFC. The evening culminated with the bestowal of the prestigious Loren Dunton Memorial Award to Dr. William Gustafson from Texas Tech University. The contributions of the these individuals are what keeps the Association thriving. As the IARFC is an international association, there were a number of members who traveled many miles to attend the conference – Kai Yuan Tu, CEO of the China Development Center; George Flack, Australia and New Zealand Chair; Dr. Jeffrey Chiew, Greater Asia Chair and Hanying “JJ” Liang, Special Assistant to the Chairman of IMM International, China. Through this interaction and presentations by Kai Tu and Dr. Jeffrey Chiew, members realized that even though the differences in culture exist, the goals and missions of the IARFC are the same.
There are times when conference plans align and everything works out as it should or even exceed expectations. That could be said of the recent 2018 IARFC Conference on the lovely Biltmore estate in Asheville, NC. The property, still owned and managed by the family, is more than the “gilded age”mansion built by George Vanderbilt. The venue quietly and gently combines a setting of learning, discovery and relaxing. The Lioncrest facility, a barn converted into a conference area (not part of the public touring), was a fine example of the Biltmore transitioning existing structures into convenient and practical spaces. Being at the Biltmore for professional meetings must be popular as plans are in the works for a new convention facility across the road. It was evident that it too will be taking on the characteristics of Biltmore class and distinction of style. The heart of the conference were the CE presentations and exhibitors. Continuing education is a way of life for financial professionals and the Biltmore Conference did not disappoint. The agenda provided ample opportunities for learning in the areas of marketing, reverse mortgages, ethics, and financial technology to name a few, from distinguished professionals in the industry. In between time, attendees wandered through the exhibitors who provided additional information about Page 8
their products and services. It is one thing to read about these offerings in the Register. These subjects come to life as one interacts with the people behind these products and services. The Awards Banquet took center stage on Wednesday evening. After being in the classroom most of the day, it was refreshing to be served dinner on the Lioncrest Veranda with walls of glass and windows overlooking the woods. The outside crept in and allowed for a pleasant “natural” dining experience. Keynote speaker, Ric Edelman, RFC®, enlightened the audience about trends covered in his book “The Truth about the Future”. A renowned success in the financial services industry, he kept the audience’s attention with his take on how consultants should be poised to help their clients prepare for future change. The perspective was new to some, to others it articulated into words what was inevitable evolution. Later a celebration of accomplishment; the presentation to Jim Moss, RFC® of the Founder’s award, acknowledgement through the Member’s Award to those who have brought members into the Association; and the announcement of Victoria Albanese from Bryant University as the winner of the National Financial Plan Competition. The newly created Ambassador Award was conferred on both
These events are a networking dream. Throughout breakfasts, lunches, conference breaks and receptions, people socialized and learned from each other. Front and center were the IARFC Board Members and the IARFC Team getting to know people – not just a name on a membership list. Linking everything together was our Conference App, which allowed people to connect with members, send messages, update the agenda, post photos, make announcements and generally kept the program organized – a definite must have conference technology. When all the learning, networking, and award giving were history, attendees strolled through the estate, took tours of the overwhelmingly opulent Biltmore mansion and its Titanic movie costumes, enjoyed the gardens and were mesmerized by the vistas of the Great Smokey Mountains. Antler Village on the property provided eclectic places to dine along with wine tastings at the Biltmore Winery. There was no reason to leave the estate except to say goodbye and sadly return to the office routine. A price cannot be put on experiences through personal interactions – which is what each financial consultant strives for as they nurture relationships with their own clients. The Biltmore conference is history, the learning and networking lives on. The Register | May-June 2018
(Above left) Ric Edelman, RFC® presented the 2018 Loren Dunton Memorial Award to Dr. William Gustafson from Texas Tech University. (Above right) James B. Moss, RFC® received the Founder’s Award presented by 2017 recipient Dr. Rosilyn Overton, MRFC. (Right) IARFC President, Peter J. D’Arruda, MRFC presented Members Award to 1st place recipient, Barry L. Dayley, MRFC. Also receiving awards (not pictured) were 2nd place – Patrick Masterson, Sr. , RFC®, and 3rd place (tied), Christopher J. Dixon, RFC®, and Chris Dantin, RFC®.
IARFC Chairman and CEO, H. Stephen Bailey, MRFC (pictured center) announced the new Ambassador Award and first recipient, Committee Chair, Jon M. Rogers, MRFC (pictured left) awards were presented by Jon to Michelle K. Blair, RFC®, Isabel Cooper, RFC®, Ric Edelman, RFC®, Ben Liang, RFC®, JJ Liang, RFC®, Liang Tien Lung, RFC®, Teresa So, RFC®, Allan Wan, RFC®, Samuel W.K. Yung, RFC®, Jeffrey Chiew, RFC® (pictured right), Ralph Liew, RFC®, Ismael DL. Melendres, Jr., RFC®, and Kai Yuan Tu, RFC®.
The Register | May-June 2018
NATIONAL FINANCIAL PLAN COMPETITION April 18, 2018, Biltmore Estate, Asheville, NC
Competition Perspective The three teams were diverse. Team CSUN traveling from as far away as California, Team Illinois being young sophomores, and a brave competitor on her own Team Bryant, joined us at the Biltmore Conference for the 2018 National Financial Plan Competition. Part of the competition process included a debriefing roundtable discussion after the 5 participants had finished their actual presentations. The results would be announced at the Awards Banquet that evening so no one was party to the scores. We know that the competition holds tremendous value for those starting their financial careers.
Students and Professors… Top benefit for all the teams was presenting their plans in front of an experienced audience. Admittedly, it was nerve wracking and scary, but the students agreed that the experience of public speaking was a valuable opportunity – something they are not used to on that level. According to Ashley Nobel from California State University, Northridge, “It is difficult to stand up in front of other professionals and then try to convince them as our clients – to make them believe that what we are doing is what we think is the best for them.” According to University of Illinois professor, Dr. Craig Lemoine, the investment the IARFC made stretches well beyond the people who were sent to the competition at the Biltmore. “The Association is building energy in the next generation of consultants by sponsoring this group. It’s not cheap to get all of us here and we recognize that. But I’m so thankful that you did, because it really creates momentum for me, moving forward, and I can’t say how much I appreciate it.” Recognition went to the Sponsors of the Competition – Money Concepts, MoneyGuidePro and IARFC members. Bryant University Professor Mara Derderian expressed “It is a great opportunity afforded by the sponsors for our students to become familiar, to network with and quite honestly to understand that there is support in the industry.
2018 First Place Victoria Albanese, Bryant University – Smithfield, RI Victoria commented… ”Coming here, meeting everyone, it’s been very encouraging. It leaves a really good taste in my mouth and a good mindset looking at the IARFC in general and meeting so many nice people who are so encouraging and receptive to the younger generation. I’m very appreciative of that and everyone who’s been so kind.”
Judges… A more supporting group of professionals you could not find. That did not mean they gave them a free pass. Questions were asked and the teams were rated on their ability to think critically on the fly. The scores were extremely close – probably the closest we have ever had. Positive comments ranged from precise organization of presentation, clarity of visuals used, proper preparation, and solid recommended strategies. It just came down to a few points here and a few points there. However, the judges were in complete agreement in the promise of competent professionals on the rise in the industry. If there was a not so positive critique across the board, it was the use of “too casual” a language when working with clients – a learning curve as they gain more experience. The Register | May-June 2018
(Above left) IARFC Chairman and CEO, H. Stephen Bailey, MRFC with 1st place winner Victoria Albanese from Bryant University, and Mara Derderian, Professor. (Above right) 2nd place winners Jocelyn Li and Presley Fee from University of Illinois, and Dr. Craig Lemoine, Professor. (Right) IARFC Vice Chairman Nick Royer, RFCÂŽ and MRFC Board Chair, Barry L. Dayley, MRFC, present 3rd place winners, Ashley Nobel and Bonnie Dang from California State University Northridge, and Shannah Compton Game, Professor.
The National Financial Plan Competition is organized through the IARFC for undergraduate students in a curriculum related to Financial Services. Participants are given a case study of a fictional family with an overview of their financial picture. A financial plan is then produced with recommendations for current and future action. These plans are sent to the IARFC headquarters for an initial round of judging. From this group of entries, six are chosen to be presented electronically with the three semi-final winners going forward to present their plans in person at an IARFC event.
The Register | May-June 2018
Marketing Unplugged Are You Keeping Up With Trends in Digital Marketing?
The world as we know it is changing. Everyone in the business has a digital footprint. You need to have an outgoing strategy while realizing that prospects will be checking you out online before they get serious about doing business. Your Digital Footprint ThinkAdvisor.com ran the article “How Advisors Are Being Found in 2015.” (1) It shared two notable statistics: “86% of American adults have researched another person using Google or another search engine” and “42% of people who have researched another person did so before doing business with someone.” Your firm likely has paid for your name and firm affiliation to come back at the top of the page when someone searches Page 12
you. It’s easy for them to check your disciplinary record too. Webpage: This leads into the importance for you to have a compelling webpage. Firms have gotten on board years ago. Although it’s probably built around a template supplied by the firm, it looks very professional. Be sure to include a photo taken by a professional. Problem: You need an online presence that tells your story. You might have high expectations for its look and design. Enter the Compliance Officer. Solution: Your firm likely has a template. It does the job. Tell your story in as compelling a manner as possible, within the rules.
Your Digital Marketing Strategy – Do You Have One? LinkedIn is a good place to start, because your prospect has likely found it on their own when they conducted their online search. LinkedIn arrived on the scene in 2003.(2) Facebook rolled out to the general public in 2006.(3) It took many financial services firms about a decade to embrace social media and find a way to monitor activity and archive communication. Then firms went in with both feet, encouraging all consultants to establish a LinkedIn presence. Once again, your firm has rules, yet they are usually flexible enough to utilize the majority of LinkedIn’s functionality. LinkedIn: The person doing the searching needs to see a compelling profile phase with a professional photo. The Register | May-June 2018
Your profile should do a good job establishing your qualifications.
client texting. Merrill Lynch announced its own program, effective Jan – Feb 2018. (7)
But you aren’t going to wait for people to discover you. If the end result is someone gets interested in doing business after learning about you and talking directly, you need to increase the probability this will happen. You need to build a network of 1st level connections. You want to play “who knows who” when you identify prospects through other sources. You want to post regularly. Again, your firm usually comes to the rescue with a library of compliance approved articles along with research reports in link format. These appear in the daily feed for your 1st level connections.
Problem: The more tech savvy the client, the more they want to communicate via their preferred channel.
Problem: Social media is virtually free. LinkedIn has about 500 million users. (4) Back in 2014, the average number of 1st level connections per user was 930. (5) It’s as if a crowd of people was shouting, trying to get one person’s attention. Solution: You need to increase the number of people hearing your message or seeing your posted content. Joining groups is a good strategy because your post is now in an additional feed for group members, many who aren’t your 1st level connections. It’s been said there are over two million groups on LinkedIn. Your alumni association or special interest themes are logical groups to join. You also want to “like” and “comment” on posts, especially in your daily feed, those from your 1st level connections. Hopefully your firm allows this activity. eNewsletters: You need a good “push” strategy. You want to get your client’s attention, especially in times of market volatility. Your firm might have standardized newsletters that can be branded with the consultant’s picture and contact information. If you are an independent advisor, there are firms selling a similar product. Problem: Tax laws change. The market defies gravity. Your client wants answers, but calling you is way down on their “to do” list. They secretly wonder why you aren’t calling them. Solution: Your eNewsletter is a timely way to put information in their hands. If you e-mail it out on a schedule, they start to expect it. Some even look forward to it. Texting: This technology got started in 1995. By 2007 it was “the most widely used mobile data service, with 74% of mobile users worldwide.” (6) About a decade has passed. Morgan Stanley was the first major wirehouse firm to allow advisor to The Register | May-June 2018
Solution: If your firm allows texting, great! If not, offer them a choice of channels that your firm has approved. Email: Many people get comfortable with a certain level of technology and go no further. Email has penetrated every demographic age group. According to PEW Research, 92% of Internet users send or receive emails daily. (8) In the age 65+ category, 87% send or receive email and 46% do so daily. The younger demographics are much higher.
from phone calls or emails. Other firms probably allow consultant to communicate via Skype or similar services. Problem: You and your client understand the value of face to face interaction, yet they don’t have the time to come to your office. Solution: Although you could travel to them, tools like Skype allow for immediate face to face contact. The financial industry has relied on face to face contact, phone calls and surface mail for decades. These channels aren’t going away. Consultants need to embrace the new (and not so new) channels we know as digital marketing and communication.
Problem: In 2015, Baby Boomers held 50% of the wealth in the US. The Silent Generation (their parents) held 33%. (9) These are the people I want to reach. Solution: Although meeting face to face is best, these two generations are more comfortable with email than social media. Webinars and Virtual Seminars – Your prospects are busy people, especially if they have young children at home. They are likely a two income family. It’s highly unlikely they will turn out for an evening seminar at a restaurant. Problem: You want to demonstrate your subject matter expertise. Retirement planning and paying for college appeals to your demographic segments. Solution: Webinars or online virtual seminars provide a channel where attendees don’t need to travel and might even be able to listen to the content on demand. Marketing for Live Seminars: Some people still want that live seminar. You can see the speaker, shake hands and make a connection. You can ask questions. Problem: Live seminars are usually marketed by direct mail. This gets very expensive, very quickly. You’ve got the meal to pay for too. Solution: Digital marketing adds an additional low cost channel you can utilize to build your live audience. Skype: You’ve seen the Edward Jones ads on TV where the consultant and client are talking via Skype. It’s not talking physically across a desk, yet it’s a significant step up
Bryce M. Sanders Bryce Sanders is president of Perceptive Business Solutions Inc. He provides HNW client acquisition training for the financial services industry. His book “Captivating the Wealthy Investor” is available on Amazon. Contact: 215.862.3607 email@example.com www.perceptivebusiness.com
(1) http://www.thinkadvisor.com/2015/03/26/how-advisors-arebeing-found-in-2015 (2) https://en.wikipedia.org/wiki/LinkedIn (3) https://en.wikipedia.org/wiki/History_of_Facebook (4) http://fortune.com/2017/04/24/linkedin-users/ (5) http://www.jeffbullas.com/25-linkedin-facts-and-statisticsyou-need-to-share/ (6) https://en.wikipedia.org/wiki/Text_messaging (7) http://www.investmentnews.com/article/20180111/ FREE/180119985/merrill-lynch-to-let-advisers-text-with-clients (8) http://www.pewinternet.org/2011/08/09/search-and-emailstill-top-the-list-of-most-popular-online-activities/ (9) https://www2.deloitte.com/insights/us/en/industry/ investment-management/us-generational-wealth-trends.html Page 13
IARFC News IARFC Revises Requirements for Financial Designations The International Association of Registered Financial Consultants (IARFC) announces that effective immediately, requirements for the RFA® and the RFC® designations have been updated. These changes involve the areas of experience and the amount of continuing education mandatory to maintain the Association designations. For the Registered Financial Consultant (RFC®), the experience requirement has been modified to 3 years of experience in the field of financial planning or financial services. This is an adjustment from the 4 year requirement. For the Registered Financial Associate (RFA®), offered to recent graduates of an approved academic curriculum in financial services or new financial professionals, they can join with less than 3 years of experience in the financial services industry working their way to an RFC®. For both the RFCs and the RFAs, all must agree to devote a minimum of 40 hours every 2 years to professional continuing education in the field of personal finance and professional practice management. This is a change from the 40 hours per year requirement. Four hours every 2 years are still devoted to ethics. For more details about CE, visit the RFA®/RFC® Continuing Education Information on the IARFC website. These changes reflect a determined intent to review and revise policies that have been inherent to the Association for many decades – thus making them relevant to industry norms going forward. “These updates are a reflection of the industry standards,” explained Chairman and CEO, H. Stephen Bailey, MRFC. “The IARFC will continue to evaluate policies to Page 14
find a comfortable balance between promoting our financial consultants and serving the needs of the consumer. An example of that balance was the formation
of our Ethics Approved Program in 2016 that added an extra layer of “protection” for the consumer while promoting the ethical behavior of our members.” The Register | May-June 2018
IARFC Professional Continuing Education Record Keeping Requirements The IARFC By-Laws Requirement. It is the firm conviction of the IARFC that the ongoing pursuit of continuing education by the professional financial consultant is critical in a social and economic environment that is ever-changing. The knowledge learned in the classroom or in the pursuit of a professional designation will grow stale, and even dangerous, if it is not enhanced by a commitment to continued learning.
CE Audit Procedure. The IARFC will conduct random audits of designees for CE records, and may do so upon challenge. During the audit, a designee will be requested to provide evidence of CE compliance that may include records, certificates, or other evidence that substantiates CE completion.
The IARFC recognizes that the delivery of financial analysis and service to consumers also encompasses ethical and effective marketing; the use of tools and procedures; and the efficient administration of a financial practice.
1. Provider Presentations. Many investment and insurance organizations present training sessions that consist of professional content, training as to the proper application of products and how their product may be used/sold. Generally, the time allocation is 2 to 1 (education to administration) - which may be used to measure units. However, frequently the entire instruction time is devoted to financial applications rather than product delivery. Normally, the presentation subject title will indicate the content. Presenters receive the same credits as attendees.
It is the responsibility of every financial consultant designee to continue their professional education and to maintain appropriate records to substantiate this significant performance. Each RFA®/RFC® designee must complete 40 units of professional continuing education (CE) every two years. • 4 hours must be related to ethics and the ethical practices of a professional financial consultant. • 36 hours from one or more of the accepted subject topics. The IARFC believes that in order to effectively counsel and serve clients, it is necessary for the financial consultant to aggressively maintain professional skills and knowledge. Unit Definition. Each unit of continuing education is 50 minutes of attendance or application. Certification. With each bi-annual renewal, the designee must assert that 40 units have been successfully completed. Certificants may request a waiver of the CE requirement, but such waiver is subject to review by the IARFC. All requests for waivers must be accompanied by documentation supporting the waiver request. Acceptable Topics. All subjects that relate to the development and provision of financial planning and counseling services are acceptable. Eligibility is not restricted to merely technical issues, but also includes how the practitioner delivers service. This includes software, Internet research, calculations, service and office operations. All aspects of personal finance, cash flow, securities, investments, insurance, banking, budgeting, estate planning, business and advisory ethics, business administration, and the legal and psychological relationships with clients are acceptable. Topic pre-approval is not required by the IARFC, however all topics must directly relate to the professional work of a financial consultant. Non-Acceptable Topics. Organizational meetings or specific sales management sessions offered by an insurance or investment company that review product details, placement procedures, operational supervision or performance are not acceptable.
IARFC Continuing Education Approved Study Methods.
2. Professional Conferences. Any professional educational event that is accepted by another licensing organization, such as PACE, bar association, accountancy board, FINRA, and for any state insurance or securities licensing is fully acceptable. Instructors and presenters receive the same credits as attendees. 3. Association Meetings. Educational components of association meetings (i.e. IARFC, NAIFA, SFSP, AICPA, FPA, AALU, MDRT) are on time allocation. IARFC live conferences will approve 2 CE units for every 50 minute session, 1 CE unit per 25 minutes. 4. Internet and Computer-Based Courses. These qualify in full, subject to the published CE amount advertised by the presenter or institution. 5. Academic Courses. Designees receive 10 units per semester credit, 7 per quarter credit for each course. Instructors, teachers and presenters receive the same credits as students and attendees. 6. Authoring Credit. A person may receive up to 12 hours of CE credit per reporting period for the publication of articles or books authored by such person. Articles and books must deal with matters directly related to the business of financial planning and consulting. An article must be published in a generally known and recognized state or national publication. Such credit must be accompanied by proof of authorship and publication. Professional articles receive 4 units each. Book authors receive 12 units.
Calendar Year Recording. Commencing with the second calendar year following receipt of the designation, and continuing bi-annually thereafter, each IARFC designee must meet the CE requirements.
7. Professional Self-Study. Maximum 20 units bi-annually • Five units may be claimed for studying a business-related book, maximum 15 units. • Academic journals 3 units each, maximum 15 units. • Trade publications 2 units each, maximum 10 units. • No credit for reading general magazines. • Retention of study notes and/or tests or quizzes required.)
Record Retention. The designee must maintain CE records for two calendar years beyond the year in question. After that, records may be discarded.
Fully retired RFC® practitioners may continue membership without CE, provided they meet the definition of retired as outlined in the Association By-Laws and have provided documentation to that effect.
The Register | May-June 2018
Register Cover Profile
Michael Jay Markey, Jr., MRFC
Like-Minded Goals Michael Markey, Jr., MRFC, our newest member of the IARFC Board of Directors, is the owner of Legacy Financial Network located in Kentwood, MI. He established the company on the belief that the client should come first and everything else will fall in line. Fueled by a narrow focus on only those in retirement and near retirement, he has carried on this belief through education, not only to their agents and staff, but also to their clients. Register: After obtaining your Bachelor’s degree from Eastern Michigan University, highlight your career progression that led you to Legacy Financial Network. Page 16
Michael: I started at Northwestern Mutual while finishing college and then within a few months I was approached by Banker’s Life. They sent me a form email, although it seemed individual, stating they wanted to interview me for a management position. Being a millennial and having six months of experience, if that! I thought, of course I should be in management. I did not fit in well at either company. Northwestern Mutual was the “quiet company,” which really meant do things our way and don’t deviate. I thought I was going to give my manager a heart attack when he found out I had been calling the EMU
Athletic Director every day morning for a few months. He said, “We don’t bother people like that here.” I said, “How can I be a bother, I’ve never talked to him. I am on a first name basis with his secretary, though!” I really didn’t fit in well at Banker’s either. They were great at teaching insurance agents how to sell, sell, sell… and there’s nothing wrong with that I suppose, but I could’ve never grown like I have at either place. Register: Who were your mentors along the way and what was the best advice they gave you? The Register | May-June 2018
Michael: When I went to start Legacy, it was the end of 2009, and a friend of mine who was a much more experienced person within the industry, said, “Mike don’t start your own company right now. You’re too young and we’re in the midst of a financial crisis. You don’t start a financial company during a financial melt-down.” I hate being told don’t do something and I’m very stubborn. But the best mentors are the people we surround ourselves with. Learning from successes and failures of grandparents, parents, in-laws…has been huge. And trying to take in from our team at Legacy who is mostly older, offers more guidance than any of them probably know. Register: Explain Legacy’s Four-Step System and how it incorporates the values of faith and family? Michael: I guess first, is I know we’re not a good fit for everyone. I don’t want to be. I don’t want everyone to be a client, I want to be around people who believe what we believe…like minded, like valued. Call me provincial but I like what I know.
Michael: If this is what I’m built to do, then we needed to be able to see more people. At different conferences I’d attend, I kept noticing the top producers all had multiple offices. Why reinvent the wheel. Register: You are known nationally for your controversial monthly column “Seriously, Dave?” written from January 2015 to March 2017 – debunking popular Dave Ramsey myths perpetuated as facts using math. Give us an example of a theory you challenged. Michael: Oh we went after just about any and everything with Dave. One of my favorites was how he used to refer to his endorsed local providers for investments as “Investing Advisors.” Interesting how similar that sounded to Investment Advisor. Well you can’t just make up your own titles in the financial world. Otherwise my title would be “The Best Darn Retirement Guru Expert Aficionado” but I think I’d have a hard time getting that through compliance. It wasn’t long after that column that Ramsey stopped calling them “Investing Advisors”.
So, within five minutes of a first appointment with someone going through our system, I ask them (I used to tell them…but begrudgingly, I’ll admit asking is better) “I think money is a tool, do you agree?” I think everyone I’ve asked has agreed. This is important because tools don’t have meaning, they have purpose. If money is a tool, then it doesn’t have meaning, it has purpose or uses. The only purpose or uses of money is to give it or to spend it. That’s it.
Register: Your radio program “Fireproof Your Retirement” is unique in that your cohost is your wife. Tell us about the on–air dynamics of this couple relationship and how it relates to the listeners.
A big goal of ours is to change lives by changing the way people think and view money. I know that probably turns some people off but that’s okay, I’m good with that.
It kind of happened by accident. I was listening to a Dave Ramsey show, go figure, and a caller asked a question and asked how Dave’s wife, Sharon, would answer. Dave in his southern charm says something like I’ve been married long enough that I can tell you what my wife would say. I immediately thought, “Wow, I’ve been married just long enough to know I should never assume I know what my wife will say.”
Our entire system is about re-framing how our clients’ view their monetary goals. Are these gifting dollars or spending dollars? I’m okay saying I don’t think we were built, or designed, to put so much emphasis and importance on something that doesn’t have meaning. When people get that, then it makes it really silly to think how many relationships are ended or ruined, tainted, over something that has no meaning. Register: Legacy Financial Network has expanded to 3 locations in Michigan. What fueled these expansions and what is your long-term vision? The Register | May-June 2018
Michael: I love it. Our taping day each week is probably my favorite day. I’m just geeked people actually like listening to us and that we get to help - but on top of that we have a lot of fun.
Without asking her, which was apparently not a nice thing to do, we pitched the idea to a few local radio stations. The stations loved it and then we reformatted the show to include us both. She says things in a way that I never would. She makes the show more fun and more relatable because she doesn’t get stuck in the finance talk and the math life I
sometimes do. I think listeners also get to hear a different side of myself that they didn’t when it was just me. Register: During local events and parades, you can be seen driving a fire truck. Why is it important for Legacy Financial Network to give back to the community? Michael: First of all, it’s a fire truck. Who doesn’t want a fire truck? I gain at least a half dozen cool dad points each year when I drop my kids off at school in a fire truck, at least one time each year. Seriously though, I just believe if you’ve been given much, then much is expected of you. I wish we did more in our community. I think we all do, if we’re being truly honest with ourselves. Register: What was your reasoning for becoming an MRFC? Michael: I was in the middle of completing the CFP® program courses. It was going fine, but I’d take a course here and there, get it done and then not think about it for a while. I might still finish it up, but I started becoming disenfranchised with the CFP® process. The information being taught was either simple stuff that I already knew, or it was information I was unfamiliar with but that wasn’t applicable to the people we serve. I didn’t like how it felt as though the courses were a means to an end. I liked the MRFC because you either know your stuff or you don’t. I asked for a study guide, and at the time, it was 4-6 books and it basically said read these. Register: Having taken the MRFC Exam, what advice would you give to potential test takers? Michael: Just go take the test. We tend to over think things. Just go do it. I think some aren’t taking it because they’re afraid they might fail. So what. Contact: 616.589.4004 firstname.lastname@example.org www.legacyfinancial.com
LFN Advisors, LLC, Legacy Financial Network and Michael Markey are not affiliated with or endorsed by the Social Security Administration or any other government agency. Page 17
Are You In A Box? a financial consultant is. Of course, most parents attend with them. There is your target market again. Offer financial information on college planning and how you can help them prepare for their other children down the line with some advanced planning. You never know if you will find your next office intern at one of these events. It could be a win-win situation - for you, the student and their parents. Bust out of that box! 4. Hire a millennial. They were born in the digital age and know far more than you could possibly expect to understand social media wise. Explain your business image and who you want to attract and let them fly with it. Before you know it, you will be sharing articles on LinkedIn, posting your marketing events on Facebook, and developing an online presence. At some point, they may even assist you with setting up a blog. This could be a niche product or service that you offer and blog followers will grow. Because you don’t know what the digital world has to offer and how to navigate it, a millennial in the office is a good hire. Now the walls of that box are opening!!
When it comes to marketing yourself and your business, your online and print presence is crucial. Thinking along the lines of the way things were done in the past doesn’t work any longer. Today’s world of social media and digital images rule the way we must present ourselves. We all must learn to think outside the box! 1. Attend a trade show or conference for an organization that one of your client’s belongs to. This will please your client and possibly get you referrals from them, just for your support efforts. It will also open the door to a market of people that probably have the funds to invest and more than likely, you will be the only consultant there. Doing a trade show or symposium arranged by organizations that you belong to within the financial world, will make you one of many consultants there. You won’t stand out from the crowd. But, for example, by attending a car parts trade show you will. Think of the amount of attendees looking to buy specialized or hard to find car parts. Think of Page 18
the money that they have behind them and how you could help. Being in a room full of car enthusiasts is certainly a thinking outside the box moment. I am pretty sure that you would be the only financial consultant there. 2. Are you doing dinner seminars? Are they working for you? If not, why not try a breakfast seminar? Many people near or at retirement age wake up early and get their day going. Maybe dinner is too late or they don’t want to drive at night. Doing a breakfast marketing event will bring in a different and more eager crowd. People are energetic in the morning and are more attentive to what you have to say. By evening your target market is winding down and they really just eat and run. Another thinking outside the box moment. 3. Newsletters? Mailings? Print media? They all have high cost involved and you never know if the addressee is opening it or just throwing it out. How about marketing your business at a college fair? Attend a career workshop showing high schoolers what being
Surround yourself with people that know different avenues of marketing and allow them the flexibility to show you what they can do. Sometimes we think too narrowly and never grow outside that box.
Michelle Blair, RFC® Michelle K. Blair, RFC® is an office administrator specializing in management and relationship building. She is a Board member of the IARFC as well as the Secretary of the Financial Planning Association, Long Island Chapter. Michelle devotes quite a bit of time to promoting professional and personal growth in the industry. Contact: 516.639.5078 email@example.com The Register | May-June 2018
Will Digital Marketing Work For Financial Consultants? The answer is, it could, if you strategically combine it with the tested Targeted Direct Mail Approach that has been proven for 22 years. There are many “start-ups” entering the marketing arena telling you that they can now generate leads for your business via Facebook or Ads online. Notice that I added quotation marks around the word start-ups above. That means they are small, lacking certain resources (both financial and human), they have little or no experience in your space, not a lot of proof, and lots of bells and whistles that sound sexy and cool making claims that it’s EASY and cheaper. I’ve always said that great marketing is never cheap, why would it be? Nothing good comes cheap…in marketing, in life, with products, services, education and many other things. Think about it, it’s actually expensive to succeed in life… hard work, investing a lot of your own money into a business, coaching sessions, conferences, sacrifices with family, time, hiring and managing personnel etc. My father told me at a young age that it was cheap to fail because if you took that approach you would never spend/invest enough money to make something work. Make sense? The point here is that there are many variables that need to be taken into consideration when using the internet to attract clients and to generate qualified leads. Starting with your ideal target audience… that very guarded 55 + year old that is still engaged with many traditional ways in life and is getting bombarded with hundreds of messages on TV, radio, newspaper, magazines and now online. Keep in mind; they still go to their mailbox 5 to 6 times a week… every single week.
these limitations and filters were developed with software that started to block emails because of spam laws and because massive amounts of marketing messages were clogging up your computer’s memory. Think about it, we all see our home phone, computer, laptop, tablet and cell phone to be very “personal” belongings of ours. Anyone invading those mediums without our approval seems more intrusive. As a result, digital messaging sent to those devices may turn people off and at times backfire on companies. Your mailbox is not as personal, it’s more traditional and it’s owned by the government. We may not like junk mail (no one does) or certain promotions but we really can’t stop the mail in general, again, because it’s operated by the government. Ask Newman the mailman character from Seinfeld (remember that episode, very funny and very true). So, it’s still acceptable to receive the right type of mail, message or offers addressed to you. Good and ethical marketers are getting better at using highly targeted lists to make
sure that you receive more relevant messaging based on your profile, interests and demographics. We all run the risk that Facebook users will start to complain about the business ads that are being pushed on their “personal” feeds. Consumers may start putting pressure on Facebook to stop the abundance of unsolicited ads… or like with many apps today they will allow you to pay or opt to block the ads. Just like with today’s email scenarios, software will be developed to filter out ads that you don’t want to receive. So yes, let’s all embrace the digital era, of course, but remember when you use it to promote yourself or your business, make sure you have a balanced approach that uses two different proven medias to reach the majority of your desired audience in your particular area. You have to do it right and strategically to maximize effectiveness. Consider using a combination of targeted & personalized direct mail with Facebook ads, and customized display ads that will pop-up on the websites of the same audience that you are actually mailing to that month. This approach would allow
Remember the advent of Email years ago? Oh, it was supposed to eliminate direct mail and save millions of trees. Everyone was predicting that the postal service would die a slow death and that no one would need to use postage stamps or physical mail again to communicate…you could now just use electronic mail, right? Well, that did not happen. It was not what the mass public wanted and then all of The Register | May-June 2018
you to reach the 3 different audiences by their response behavior; those that look and respond to mail, those that want to get their information online and those that surf the net and click on ads that they are interested in. This balanced approach will also allow you to identify and track what types of messages or offers pull the best. You will develop marketing intelligence that will provide you with facts about response versus just going by gut feeling or what you think may work. Your audience will tell you how to approach them. Keep in mind; you have to be in front of them when they are ready to take action not when you need to make sales. It’s about timing, frequency and investing on the right marketing mix to get you the highest ROI yields for your marketing dollar. My last word of advice… do you really know what your true cost per lead is? Also, what is your cost per new client? You have to know and understand these two important figures very well. It will allow you to make very prudent decisions as to where you should invest your marketing dollars. Only when you track things and identify your costs to get in front of prospects will you know how to promote your business. Being a savvy marketer will allow you to stand above other competitors in your community and will also help you build a better practice with a continuous flow of motivated prospects.
RFC® Note Cards
Use the RFC ® Note Cards for quick personal Thank You notes. Order your RFC® Note Cards, packages of 25, $15 plus s&h, quantity pricing available Attractive, formal note cards. White exterior with RFC® logo in dark blue. Blank inside allows for handwritten
Jorge Villar Jorge Villar is the President and Founder of RME360, a $24 million dollar marketing powerhouse. With more than 26 years of direct marketing experience, he is known in several industries for his ability to create campaigns that garner the highest response rates. He is the innovator of the National Seminar Success program that for the last 17 years has accounted for more than 65% of the seminar events being held nationwide, with over 17 million attendees. Contact: 813.885.8231 firstname.lastname@example.org www.rmeleads.com
notes. The back side of the card displays the IARFC Code of Ethics. Envelopes have gold foil on the inside flap. 6.5” wide x 4.25 length folded. Visit the IARFC store for these valuable branding tools. store.iarfc.org or contact 800.532.9060, email@example.com
IARFC INTERNATIONAL ASSOCIATION OF REGISTERED FINANCIAL CONSULTANTS
The Register | May-June 2018
Competitive Group Insurance Offered to IARFC Members L i f e A D & D LT D K EY B E N E F I T S I N C L U D E :
IARFC INTERNATIONAL ASSOCIATION OF REGISTERED FINANCIAL CONSULTANTS
• Life, AD&D and LTD Insurance • Highly affordable premiums with core coverage • Guaranteed issue/no medical or financial underwriting • Competitive premiums designed for consultants • Travel benefits and employee assistance programs For new members, these plans are available up to 30 days after joining the Association with no medical form required – guaranteed issue up to $250,000. For current members, applicants must provide medical history. There is no physical required, an in depth questionnaire is sent to underwriting to make a determination. Medical questionnaires vary from state to state. Questions? Call plan administrator: Michael Insurance Planning 800.932.4075 download program brochure www.IARFC.org/Insurance partner program with The Standard Insurance Company and Michael Insurance Planning Company
5 LinkedIn Steps That Will Double Your Business You are working hard to bring in new business. But rejection is intense. Cold calls have a 4% closing rate in booking appointments, not on dials, but those you speak to. Mailings have ½ of 1% success rate in getting respondents to call you. Maybe you will be lucky enough to catch them in the middle of a retirement decision. Building your business is hard work; unless you know a few secrets.
every three months using the Catch Up, Update, Referral strategy and gave the C’s to his colleagues. Before the calls, he would connect with his clients using LinkedIn. 70% were already LinkedIn members, so that was easy. But on the call, he would do an economic update and his best guess as to where the economy was headed. 38% had more assets or wanted to update their life insurance. For those not yet ready, he asked about the 4 LinkedIn contacts they had. He asked how well the client knew them and would they send a note of introduction. All agreed.
We know affluent financial planning/ retirement clients are hard to find. They usually don’t respond to cold calls, dinner seminars or mailings. We also know they are unlikely to refer to you. Why? You didn’t do a good enough job? No, because you don’t keep in frequent enough contact. Clients want an ongoing relationship. They want to talk to you every 3 months. They didn’t sign up to be made a transaction. So if you can keep in contact every 3 months, you will get all their protection and investment assets. You will have no competition. But if you are really good, you will also get referrals. Referrals are 35% more likely to do business with you, unlikely to make you compete for their business and will earn 25% more revenue per sale than any other marketing method. But you probably have asked for referrals without result. It has been frustrating, hasn’t it? Now We Have LinkedIn
After connecting with the referral on LinkedIn, he asked to chat on the phone for 10 minutes to get to know them better. Few refused. Matt then put each referral into the 3 month call rotation and doubled his business without spending a dime on advertising. 2. When your client accepts the connection, filter their connections. You can filter for location, years of work experience, title and position. In other words, you can filter for the affluent. 3. When you phone your clients every 3 months, identify 4 of their connections and ask how well they know their LinkedIn buddies. Chances are they know only 50%, the rest are blind connections.
51% of LinkedIn users, unlike Facebook, are affluent. They also average 930 connections. LinkedIn has 53% more engagement efficacy than any other social media channel. The best part is you can view all of the contacts of every LinkedIn relationship you have. But unfortunately, many of the connection requests you get are those just clicking without knowing who you are.
4. Connect with the referrals using a personal message referencing your mutual friend. This will drive your connection rate from 35% to 85%.
Here are a few steps you can use to turn those connections into business.
How My Client Doubled His Business
1. Start calling your clients every 3 months. Use our 3 Month Call Script method. Catch Up, Update, Referral. Before you call your clients, connect on LinkedIn. Page 22
5. Once the referral connection is accepted, send a message asking to talk on the phone to find out more about them using a referred lead script.
One of my one-on-one coaching clients, Matt, spent $10,000 in mailings trying to originate new business. Of his 200 clients, he segmented them into 15% A’s, 35% B’s and 50% C’s. He personally called the A’s
Kerry Johnson, MBA, Ph.D. Kerry Johnson, MBA, Ph.D. is a best-selling author and frequent speaker at financial planning and insurance conferences around the world. Peak Performance Coaching (his one on one coaching program) promises to increase your business by 80% in 8 weeks. To see if you are a candidate for this fast track system, visit www.KerryJohnson.com/ coaching and take a free evaluation test. You will learn about your strengths and what is holding you back. Contact: 800.883.8787 firstname.lastname@example.org www.kerryjohnson.com The Register | May-June 2018
How To Be In Front Of Your ‘IDEAL’ Life Insurance Prospects! Prospecting doesn’t have to be hard, frustrating or expensive, if you’ll take the time to learn to properly and effectively market your services in your local community. With a few minor changes and applying some simple techniques… “You can be in front of more of your ‘IDEAL’ life insurance prospects in one month than most consultants will see in an entire year.” Each and every one of you can double or triple your income, if you’ll recognize that this, or any business you’re involved in, is about your ability to consistently attract your ‘Ideal’ prospects to you. Your success in business is ultimately determined by your ability and willingness to market yourself and your services to your ‘Ideal’ prospects. Let’s Get Down To The Critical Issues If you want to succeed big time in this business, it’s actually incredibly easy if you’ll first determine WHO ARE YOUR IDEAL PROSPECTS… then follow three critical steps… avoid two common mistakes… and learn one simple truth! So, Who Are Your ‘Ideal Prospects?’ In simple terms your ‘Ideal Prospects’ are the people you have the best chance of setting an appointment with and selling. You must know EXACTLY who your ideal prospects are. You need to know more than just the demographics. (age, income level, etc.) You need to know WHY they’re struggling, what they most want in the world, what their values are, etc. You need to be able to connect with them on a deep emotional level and that means knowing what’s important to them and what keeps them up at night. Now Follow Three Critical Steps: The ‘Right Message’… to the ‘Right People’… at the ‘Right Time’! Step One: The ‘Right Message’ is really about you deciding what specific problem The Register | May-June 2018
you are going to specialize in solving for people, to attract them to you. If your prospect doesn’t see they have a problem and understand how you can help them, is there any reason for them to take their precious time to meet with you, let alone buy from you? (And, it’s NOT about your hot new products, having the lowest premiums, highest investment returns, a slick new sales idea, the companies you represent, or your credentials!) Step Two: To The ‘Right People’ is about sending your special message to your ‘Ideal Prospects’. These are the people who need and will benefit the most from your services; can be seen on a favorable basis; and have the ability to pay for your services. Step Three: At The ‘Right Time’ is making sure your ‘Ideal Prospects’ see your message when they are ready and able to take action. “People buy when they are ready to buy, not when you are ready to sell.” So, if you want to sell them you must be constantly in touch with your best prospects, so you are there when they are ready to buy.
sporadic. You never know who will read your Ad or sales letter and then respond. The main problem is that you are generally following-up the responses to try to set appointments with people who have never heard of you before. Learn One Simple Truth People always prefer to work with someone they already know and can trust. The more good things people hear about you and the work that you do, the easier it’s going to be to get them to respond to your offers, set appointments, and buy from you. So, What Does All This Mean What it all means, is that if you want to be in front of more of your ‘IDEAL PROSPECTS’ in one month than most consultants will see in an entire year, then you must have a ‘complete’ marketing plan that you work on every day!
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Avoid These Two Common Mistakes First, most consultants want to believe that marketing is something you can do every once in a while when you decide you need more prospects. They believe it’s like a water faucet that you can just turn on whenever you need water. Consider, the only reason you can get water immediately from your faucet, is all the behind the scenes hard work the water department does ‘everyday’ to keep the water running fresh and clear. Your marketing, attracting the right prospects to you, requires the same daily attention, if you want to keep a steady flow of the ‘IDEAL’ prospects. Second, contrary to what most consultants are being taught today, effective prospecting is NOT a numbers game. The ‘old fashioned’ shotgun prospecting approach most consultants learn is that if you contact enough people, (buy enough leads, cold call enough people, run enough Ads, or send out enough sales letters) you’ll eventually find enough prospects to set enough appointments, to close enough sales, to make the income you want. This ‘Numbers Game’ approach to prospecting can work to some extent, if you work with large numbers of people and you do it consistently. However, it is very time consuming and expensive. And, even when you do work with large numbers, and do it consistently, the results can be very
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The Register | May-June 2018
Jeffrey Concepcion, RFC® Founder and CEO, Stratos Wealth Partners
Developing Relationships Jeffrey Concepcion, RFC®, Founder and CEO, launched Stratos Wealth Partners in November of 2008 to fulfill a growing need among experienced, sophisticated advisors and their accomplished clients. Jeff, like many others, had become increasingly dissatisfied with existing brokerage models that made it more and more difficult for advisors to place their clients’ interests first… Thus is the beginning story of Stratos and Jeff Concepcion. The IARFC looks for opportunities to partner and support consultants by presenting options to help these individuals achieve their fullest potential. Sometimes that mindset is outside the “norm” and requires support from many places. Per Jeff… “The Stratos Wealth Management Corporate Services are designed to help you operate a smarter, stronger business, while meeting competitive challenges and maximizing your profit potential.” The Register | May-June 2018
Register: How does your infrastructure helps consultants focus on their core competency)? Jeff: Most advisors’ passion and competency intersect at client acquisition, relationship management, and oftentimes at a lesser degree, financial planning & asset management. Few advisors have the knowledge or experience necessary to launch an independent practice as it relates to regulatory and compliance issues, real estate, HR, benefits, technology and vendor relations. The infrastructure offered by Stratos allows advisors to spend time doing the things they enjoy while providing a high level of support in other non-core, but essential, functions. Register: How do you help consultants establish themselves as independent advisors? Jeff: Advisors have the option to do business as Stratos Wealth Partners or under their own company name, as an approved DBA. In either case, Stratos provides one on one marketing support to help our advisors with branding and marketing. From designing logos and brochures to social media and website development, we assist with establishing their presence and promoting their brand. We also negotiate discounts with third party marketing and technology resources for specialized services our advisors need. Our dedicated marketing team will consult on targeted marketing efforts and provide compliance approved, ghost written communications advisors may send to clients and prospects, or post to social media as their own. Register: Explain how Stratos is Advisor or Client Centric. Jeff: Stratos was founded by advisors, to serve advisors, and to help facilitate the successful management of their businesses. More than 90% of Stratos equity is owned by licensed/affiliated advisors who operate their business within the Stratos network. While we’ve always been driven by advisor input, we recently formed an Advisor Council to create a more formalized way form them to influence our current and future direction. Register: Why do you feel your method of delivering a “truly elevated wealth management experience” has been successful? Jeff: Building the infrastructure and having resources available are the foundation of offering a quality experience. It’s an organization’s ability to deliver on those Page 26
promises that matters most. In today’s business world, simply doing what you say you’re going to do creates good will. Going above and beyond that creates loyal and committed partners. In all cases, even to the detriment to our own organization, we always strive to be fair and balanced in our partnership with our advisors. Register: How do you see Stratos and the IARFC working together? Jeff: The barrier to entry to be a financial advisor today is minimal. Organizations like IARFC help to create a higher standard of credentials for practicing advisors. I’m hopeful that as our organizations get to know each other better, that more of our partners will seek to elevate their deliverables through both the accreditation and education offered by IARFC. In an effort to reciprocate, I look forward to personally being involved and offering all available Stratos resources to support the IARFC’s continued success. Register: What do you see is the value of the IARFC and the designations (Registered Financial Consultant, RFC® and the Master Registered Financial Consultant, MRFC) we offer? How can Stratos advisors utilize these designations? Jeff: Both designations are a way for our advisors to set themselves apart. The continuing education requirement demonstrates a commitment to constant development to keep up with the rapidly changing landscape of financial advice. The value of an international organization awarding an “Ethics Approved” status to members meeting those requirements is another differentiating factor that is more relevant now than ever. These elements of membership should be of great importance to clients as they look for an accredited advisor they can trust. Stratos maintains a robust financial planning department that offers our advisors a resource for financial plans and plan reviews, whether or not the advisor is a CFP®. We are looking forward to adding the IARFC as an additional resource for this area of their practice as many of the IARFC member benefits are focused on planning. Earning either the RFC® or newly accredtited MRFC designations will also provide many Stratos advisors the ability to increase their hourly consulting fees by meeting the additional designation requirement. Contact: 866.553.9882 firstname.lastname@example.org stratoswealthpartners.com
IARFC INTERNATIONAL ASSOCIATION OF REGISTERED FINANCIAL CONSULTANTS
Member-Refer-A-Member Enhance the Designation "The only way that an Association grows is by attracting new members,” confirms IARFC Chairman and CEO H. Stephen Bailey, MRFC. Encouraging your peers to join is the best recruiting effort an Association can utilize. We salute your pride in being a Registered Financial Consultant and are proud to have an award recognition program dedicated to members who have contributed to the growth of the Association. The Member’s Award is presented annually in appreciation to top IARFC members who have sponsored the most qualified professional consultants that subsequently joined the ranks of the Association.
An Ongoing Opportunity The IARFC is looking to enrich the careers of your professional peers with the same membership benefits you enjoy. By referring potential IARFC members, you offer them an opportunity to tap into the premier network of members who share best practices, strategies to help grow businesses and techniques for better practice management.
Referring a member is easy! Take a few minutes to grow our network of the Registered Financial Consultants. Fill out the Referral form by going to: www.IARFC.org/ReferMember Call: 800.532.9060 Email: email@example.com
For details go to: www.IARFC.org/ReferMember The Register | May-June 2018
Change the Rules of Engagement It could be said to be an eternal question: how to provide something of value to a Prospective Client (PC), early on, so they can see a distinct difference and advantage and hire me as their financial consultant? When someone is looking for a new consultant, broker, planner, or whatever your niche is, they may interview two or more professionals. They’ll want to see what you have, what you charge and how you’re going to help them. Are they going choose you because you’ve got better products or better more intriguing pie charts, use more impressive research- oriented words or have more letters after your name? Or maybe you have more charisma, charm, status in the community, or a bigger advertising budget? Yes, these are good and may get that PC in your office, but don’t be fooled, that PC hasn’t made a commitment to you. They have not been won over, yet. The Register | May-June 2018
Taking a closer look, if we refine that question a bit more and say, “Alright, it’s me vs. you, and we are both reasonably good looking, nice, friendly, fairly well-known at least, and so on, what is really going to make the difference? I’ve got goals to meet, bills to pay and of course, so do you!” The answer in a nutshell is: change the rules of engagement. In my experience, the sooner I can diagnose the Prospective Client’s problem areas and stay focused on those areas, the more I’m going to get their attention. Now, when I say diagnose someone’s financial problems I mean, just that. Most of the time, if I ask what the problems are, I will get answers that are valid, but more importantly, those are symptoms, not the deep routed causes. Not enough income, too much in taxes, spousal protection, spending down money, etc. are all things that will worry someone, but we need to
find out the real reasons this is happening and offer solutions that can fix these issues now and into the future. My best bet is to show the real effect avoidable taxes have on their money. If Ican demonstrate the insidious effect high fees have, and how their ability to generate sustainable income may be compromised, I’m more likely to catch and keep their attention. Conversely, if you’re my competitor and you go into the “green line chart” and “zero is my hero” and “tax -free income” from UL, without a full-scale diagnosis, you may win the business, but going up against me, it’s going to be difficult. I’m going to feed them a lot of quality and digestible information, so they get it and will more than likely turn in my direction. We all have planning ideas and ways of using financial products such as annuities, life insurance, asset management platforms Page 27
and so on. They are, frankly, a dime a dozen. The consumer really has no idea which annuity or AUM strategy is better than the other. And even if they had an inkling, they rarely believe it. Folks have become very skeptical these days. They look to us to guide them in these matters, but what is so arduous for the average PC is how to wade through tons of numbers and pies, and determine what is best. For example, I once had an engineer run massive spreadsheets and despite his sincerity, still couldn’t figure out which crediting methods were best, and we parted ways without getting anything done. My strategy is to focus, uncover and educate what the problems really are, and explore them, all in a nice and friendly way. If the PC has some money, married, cares about their family, and has decent or better income, I’m going to find at least 5 or 6 problem areas to address and explore. And I’ll stay on them. I won’t discuss solutions until A. they agrees there is a problem and understands it and B. agrees it needs to be fixed, showing a desire for improvement. The game plan is to give factual data, explain it, and ask their opinion about it. If the PC indicates it’s not a concern, I’ll agree and move on, but also keep that in my back pocket. It could be a smoke screen and this area could come in handy later. When I find 5 other issues and the PC keeps denying any interest, then I’ve got someone who has an agenda that is different than it appears. On the other hand, what is more likely to happen is that they are starting to get the message there are deeper problems and ought to start paying attention to what’s going on in our meetings! LEAP, COW, Torrid Tech and others are good platforms to use to “blow up their island” as a certain pioneer in the industry has repeatedly said. The first 2 are very expensive and complicated. When I used them, I had a hard time understanding the analytics myself, let alone try to explain them. The 3rd one is good, but just doesn’t have enough meat on the bone, in my opinion. So, what topics do I discuss and demonstrate, you may be asking. Here is a list of subjects I address in the first two meetings with a PC. Page 28
Cumulative deposits on all investment types, taxes, fees, term and/or perm life premiums, lost life insurance benefits, LTC premiums, mortgage interest, lower pension costs to protect a spouse, lower Social Security options as costs, lost incomeproducing assets due to low returns or losses (while taking income), Superior Debt Pay-Down methodology, income with variable returns and tax rates
Education Experience Integrity
Separate Tax-class in pies, Dividends calcs, Rental Property calcs, Primary Residence, Mortgage calc w/ tax benefits, Large Asset-class Pies, Inflation, Massive and Detailed Budgeting, Various Ratios of Gross and Net Profit vs fees and taxes, Options to adjust tax rates, ROR, Fees, additional deposits, matches and more. The idea is to establish where the PC is headed if the current course of action continues! If you can beat this agenda, you’ll win our friendly little above-mentioned competition. If not, watch out! Using these analytics, the PC invariably has a “wow-experience”, and sees me as someone who really knows what he’s doing and can simply explain complicated issues. Best of all, their consultant will know this real issue and can now devise real solutions. How hard is it now to get referrals, and pull in more AUM, life and annuity premium? Not hard at all! If you’d like my assistance in incorporating this approach into you practice, I’m glad to help you!
IARFC Brochures — a well mapped informational flow for a successful and lasting relationship between You and Your Clients/Prospects.
Jay Weinstein, RFC®
IARFC INTERNATIONAL ASSOCIATION OF REGISTERED FINANCIAL CONSULTANTS
Jay Weinstein, RFC is associated with Independent Planner Core Financial Design, serving clients nationally for 15 years, based in Tampa, FL. ®
Contact: 813.207.4922 firstname.lastname@example.org www.corefinancialdesign.com
Order your IARFC brochures at: www.IARFC.org/Store or call 800.532.9060, or email email@example.com
The Register | May-June 2018
The Register | May-June 2018
International News From the Heart, Comes the Passion
In March I returned from my second international trip as US Chairman and CEO. My role this time was same as the first trip – find out what they needed. It became even clearer that they are doing things their way with impressive success. Their need was forthcoming however, make the US Association stronger at home.
IARFC China, 2018 Beijing: Kai Yuan Tu, CEO/IARFC China Development Team and H. Stephen Bailey, US Chairman and CEO meet the 198 newly graduated RFCs and handout their diplomas.
My trek was a dichotomy of two temperatures. A cold and snowy Beijing in contrast to sunny and warm Sanya, a resort island in the South China Sea – a four hour plane ride from China’s snowy capital. Even though the outside environment changed, the welcome from both of the Chinese communities were the same, welcoming and appreciative. In Beijing, I was pleased to meet the 198 newly graduated RFCs and hand out their diplomas. My presentation to them was entitled: Financial Consulting, a new graduate’s primer — appropriate, as it was a message of elementary principles to follow when beginning a financial services career. My own new experiences during my visit were getting used to delivering a talk with a Chinese translator, and being the object of intense picture taking from the graduates. I felt truly honored to celebrate their accomplishments. In Sanya, it was my privilege to speak to approximately 500 RFCs at the 4th Annual Greater China Conference. This annual meeting by invitation only, brought RFCs together to discuss what is going on in the marketplace, insurance products and issues Page 30
IARFC China, 2018 Beijing Graduation, presented by Kai Yuan Tu CEO/IARFC China and H. Stephen Bailey, IARFC Chairman and CEO.
IARFC China, Sanya, South China Sea 4th Greater China IARFC Conference. The Register | May-June 2018
Upcoming Events IARFC China August 2018 Worldwide China Life Congress Kunming, China
for agents and reps. My topic at Sanya was titled Advice from a Veteran Consultant. However, direction was given to me — cover the material but speak from the heart. Fulfilling that request, my delivery became so passionate that I was asked to slow down so my interpreter could keep up. There is a special bond between the talker and the interpreter. Kai Tu performed these duties admirably and in no time at all, we were on a roll! A most heartwarming response came from an attendee who approached me afterwards. He had connected to the stories of my upbringing in the mountains of North Carolina and how my environment had fostered a natural independence. This man smiled and in broken English told me about his own childhood in the mountains in China and his similar youthful experiences. It hit home then. Regardless of the culture, we are more alike than we are different.
IARFC China, Sanya, South China Sea 4th Greater China IARFC Conference (L-R) starting 5th from left, Liang Tien Lung, Chairman Greater China, H. Stephen Bailey, Chairman and CEO US, Dr. Teresa So, Chairman, Hong Kong and Macau, Kai Yuan Tu, CEO/IARFC China with RFC® candidates.
H. Stephen Bailey, “Steve” Bailey, CEBA, LUTCF, MRFC started HB Financial almost 30 years ago after already having a life insurance career. Steve is Chairman and CEO of the IARFC Board. He is also the 2010 recipient of the prestigious Loren Dunton Memorial Award. When not working with his clients you will find Steve on a golf course, spending time with his grandson or traveling with his wife, Bobbi. Contact: 704.563.6844 firstname.lastname@example.org www.iarfc.org The Register | May-June 2018
Sanya, China; 4th Annual Greater China Conference, Kai Yuan Tu, CEO/IARFC China Development Team introduces H. Stephen Bailey, US Chairman and CEO to speak to approximately 500 RFCs, presentation “Advice from a Veteran Consultant.” Page 31
Consumer Focus Some Rules are Better Than Others The “Four Percent Rule” The professionals you trust to help you find your retirement number need to be (a) competent (b) knowledgeable, and (c) have your interests at heart above their own. Yes, you must take care not to be taken in by some of the baseless propaganda produced by Wall Street when it comes to investing. An investing “rule-of-thumb” that has been bandied about for the last few decades is something called the “Four Percent Rule.” It is one that has been floated by Wall Street for years and is as bogus as a three-dollar bill. By the way, the expression “rule-of-thumb” comes from the days when people built without accurate measuring tools. In medieval times, an inch was often the length of the first joint of the builder’s thumb. By the time of the 17th Century, the phrase “rule-of-thumb” was in metaphorical use throughout the English-speaking world. Any time you are given a “rule of thumb” as a guideline, it comes with built-in wiggleroom for inaccuracy. Essentially, the “Four Percent Rule” holds that you could take 4 percent of the value of your invested portfolio out each year and have about a 91 percent chance of not outliving your money. The worrier in Coach Pete is concerned about that nine percent. Even if the “Four Percent Rule” were true, that means that nine out of 100 people who use it will run out of money before their life ends, and that’s not acceptable to me. Losses and Recovery If you lose 50 percent in the stock market, and then you gain 50 percent back, are you even? Not by a long shot. If you have 50 percent losses, you need 100 percent gains to get back to even. Think of four quarters. Take two of them away. You just lost 50 percent of your quarters, which means you have two quarters. If I give you 50 percent back of what I took away, I’m only giving you back one quarter, right? Like I say, money is math and math is money. Keep in mind, as you recover, you are not gaining money. You are just getting back to Page 32
even. It could take you years – even decades – to get back to where you started. This is why I encourage people to minimize risk as they approach what I call the “Financial Red Zone” – 5 to 10 years away from retirement. The objective is not to fumble the ball as you approach the goal line, so to speak. If you lose money here, you may never get it back. And if you do, the time you wasted doing so could have been the best years of your life. Instead, they are fraught with despair making up what you lost. The “Rule of 20” Wall Street has come up with a new rule called the “Rule of 20” which says that if you divide your age by 20, then whatever number you come up with is the percentage of money that you can have with a 92 percent chance of not outliving your money. A good example of this is if a person is 60 years old and thinking about retiring, and they divide their age by 20, they come up with the number three. So, according to the “Rule of 20,” three percent of your value could come out each year, and you have a 92 percent chance of not running out of money. Call me skeptical, but there is just not enough data available for me to put faith in the “Rule of 20.” And, even if there were, I still worry about those poor eight out of 100 who will be wards of the state or a burden on their families when their cash flow dries up in old age. Another version of the “Rule of 20” holds that you take the amount of income per year you need in retirement and multiply by 20. Let’s say you need $30,000 per year in retirement. Then you should have $600,000 in your nest egg. The “Rule of 20” estimates that should carry you through for about 25 years or so. What the “Rule of 20” doesn’t tell you is how to invest the money. Again, I am flying blind here, folks. I don’t have enough data, and I smell a rat if the proponents of this “rule-of-thumb” are saying put it all in the stock market. Where are the warnings about risk and volatility? Where are the guarantees? This formula is especially troublesome for most “average” Americans of retirement age who have between $25,000 and $100,000, depending on whom you believe. (1).
The “Rule of 72” One rule that has some mathematical teeth is the “Rule of 72.” If you are trying to build money, you need to be familiar with this rule. The “Rule of 72” says that whatever interest rate you are offered, divide that into 72 and the number you get represents the number of years it will take for your money to double. Let’s say we have a 2 percent interest rate at the bank. I know, in the interest rate environment we are in as this article is written, that’s being generous. But let’s use 2 percent in the interest of easy math. Seventy-two divided by two equals 36. That means it would take 36 years for your money to double. That is totally unacceptable to me and most financial consultants I talk to. The “Rule of 96” Now, are you ready for the really bad news? The “Rule of 72” applies to qualified accounts – those accounts you’re not paying taxes on each year. If you are in a taxable account, you must use the “Rule of 96”, which means you must take the interest rate (2% in our example) and divide it into 96 to get the number 48 – the number of years it will take your money to double. Even more totally unacceptable! The “Rule of 100” People trying to accumulate money sometimes take more risk than they should. Some are so cautious they take too little risk, or no risk at all. So, how do you know how much risk is appropriate? This is where the “Rule of 100” comes in. Take your age and subtract it from 100, and that is the risk-appropriate percentage factor. In other words, if you are a 60-year-old, the “Rule of 100” says you should have 40 percent of your money at risk. That means the other 60 percent of your money should be tucked away in investments and financial instruments where your principal is protected. It needs to be growing and not shrinking, hopefully at a rate that at least outpaces inflation. There are ways to do this, but not using the Wall Street model. The Register | May-June 2018
Why the “Four Percent Rule” Doesn’t Work Anymore Some financial advisors still use the old “Four Percent Rule” to guide their clients in retirement. In a nutshell, the “Four Percent Rule” holds that if you retired with $1 million, you could withdraw $40,000 (4% of $1 million) each year for the rest of your life and, by rebalancing the remaining balance in a mixture of stocks and bonds, never run out of money in a typical 30-year retirement. The father of the “Four Percent Rule” is William Bengen, a financial advisor from California, who arrived at his conclusion after studying historical market returns available up to 1994. The idea gained even more momentum when three professors at Trinity University in San Antonio, Texas, began compiling data on investing for retirement. Like Bengen, they took three elements into consideration: life expectancy, withdrawal rates and historical stock market returns available up until 1998. Like Bengen, their objective was to calculate how much the retiree could safely withdraw each year, keep the rest growing in the market, and have income for up to 30 years. They tried different withdrawal rates and finally landed on the 4 percent area as their magic number.
The “Rule of 30” The number 30 is another important number to consider when you are seeking to understand your finances. When we hear the Dow Jones Industrial Average announced on TV, they are talking about 30 stocks. The “Dow”, as it is commonly known, is an index that takes 30 diverse companies, representing all sectors of the market, and uses an average of their share prices to reflect the market. Dow companies are considered stable and consistent, and as such, are considered accurate indicators of the overall health of the market. But if you are left scratching your head when you see that the Dow is up while your portfolio is down or vice versa, please understand that your portfolio is probably not a mirror image of the Dow Jones Industrial Average. The Dow roster includes some well-known giants, including such names as Microsoft, Apple, Nike and General Electric. But only thirty stocks. That’s it. Hey, rules-of-thumb aren’t absolute, but knowing them can help shape a plan that is at least halfway understandable. Now go out there and rule your day.
After the professors published their study, the media and Wall Street pounced on it and proclaimed it the Holy Grail of investing By now, if you have been following the stock market in the last three decades, you can easily see why the so-called “Four Percent Rule” doesn’t work anymore. The 1990s were boom years for the market. Remember the dot-com go-go years, when the tech industry was soaring and anything you invested in that ended in dot-com came up a winner? Then you also remember what happened when it all came tumbling down, and the tech bubble burst. Then, the market struggled to recover. By the time it had, along came the financial crisis of 2008 and the Great Recession which followed. The decade which began in 2000 has been called the “lost financial decade” because, after the dust settled, it was a sideways market that left investors back where they started. So much for the “Four Percent Rule” . By the late 2000s, articles and studies proclaiming the “Four Percent Rule” no longer valid started coming out of the woodwork. A 24-page report entitled “The 4% Rule – At What Price?” appeared in the Journal of Investment Management in 2009. The paper, written by Jason S. Scott, John G. Watson and William Sharpe, winner of the 1990 Nobel Prize in Economics, called the idea “fundamentally flawed.” (2) Financial writer, Kelly Greene, in an updated article which appeared in the March 1, 2013, issue of the Wall Street Journal entitled, “Say Goodbye to the 4% Rule”, wrote the following: “Well, it was beautiful while it lasted. In recent years, the 4% rule has been thrown into doubt, thanks to an unexpected hazard: the risk of a prolonged market rout the first two, or even three, years of your retirement. In other words, timing is everything. If your nest egg loses 25% of its value just as you start using it, the 4% may no longer hold, and the danger of running out of money increases.” (3) The Register | May-June 2018
Peter J. “Coach Pete” D’Arruda, CTC, MRFC Peter J. “Coach Pete” D’Arruda, CTC, MRFC is a Financial and Tax Coach. He is host of the nationally syndicated weekly radio show, The Financial Safari, as well as the author of four books, including “Fine Print Fiasco”, “Financial Safari, 7 Financial Baby Steps” and “Have you been talking to Financial Aliens?” Themes of these easy readers include helping others avoid being taken advantage of and translating financial jargon for any layperson. Contact: 919.657.4201 email@example.com www.capitalfinancialusa.com (1) Source: The Greatest Retirement Crisis in American History by Edward Siedle; March 20,2013; Forbes] (2)[Source: https://papers.ssrn.com/sol3/papers.cfm?abstract_ id=1115023] (3) Sources: http://www.forbes.com/sites/wadepfau/2015/06/10/ safe-withdrawal-rates-for-retirement-and-the-trinity-study; http://www. investopedia.com/terms/f/four-percent-rule.asp?lgl=no-infinite]
The Register taps into the experience and viewpoints of the IARFC Board. They come together from different backgrounds, with different goals and expressing different opinions. The constant is the respect and dedication given to their commitment to the IARFC.
A Case for Charity Use life insurance to benefit a favorite charity. It can benefit you too! Have you entertained the idea of leaving a sizeable gift to charity after you pass away? Consider using your life insurance policy to support your favorite cause. Here’s how: 1. N ame the charity as the beneficiary of your life insurance policy so the death benefit automatically gets paid to them. Pros: The policy proceeds, while includible in your estate at your death, will qualify for the estate tax charitable deduction to the extent the policy proceeds are paid to a charity.
Cons: While a beneficiary designation is simple, private and requires little documentation, it is important to understand that because you retain control of the policy you will not be able to take any income tax deductions during your life.
2. D onate your life insurance policy to charity. Pros: This approach allows you to make your donation by transferring all rights of ownership in the policy to the charity. Where future premiums are required, your payments can be structured to qualify as charitable deductions for income tax purposes. The charity benefits since it has control of cash values and dividend rights, and receives the death benefit free of federal income, gift and estate taxes. Probate and other administrative costs and delays are also avoided. Page 34
Cons: As the donor, you lose control of the policy. 3. Help the charity purchase a new policy. Under this approach, the charity names itself as owner and beneficiary and is responsible for making premium payments. Of course, you can assist them in the process by making cash contributions equal to or greater than the needed premium dollars on an annual basis.
an irrevocable life insurance trust (ILIT) to ensure that the policy proceeds will not be included in your estate at your death and that your heirs will receive the entire death benefit without losing some of it to estate taxes.
Pros: If structured properly, an annual charitable deduction should be available, subject to the general limitations placed on charitable contributions. Cons: The charity is not obligated to maintain the policy nor are you obligated to continue premium contributions. If this plan is intended to serve as a future endowment, both parties must understand their roles if the plan is to be successfully brought to completion. 4. Gift assets to the charity and replace family wealth through a wealth replacement trust. Pros: By directing the tax savings generated by your charitable gift to the purchase of a life insurance policy, you can donate your assets to charity and still provide a benefit to your heirs.
Cons: You’ll need to make sure the life insurance is owned by your heirs or by
Mayo M. Woodward, RFC® Mayo M. Woodward, CRPC®, RFC®, a native Floridian and Emory University graduate currently sits on the Board of Directors for the IARFC. Many years of service in the Financial Services industry culminates in his current position with Prudential Financial. He holds the Series 24, 7, 9, 10, 63, 65, 31 and life and health insurance licenses. Contact: 205.948.2596 firstname.lastname@example.org Prudential Financial, its affiliates, and their financial professionals do not render tax or legal advice. Please consult with your tax and legal advisors regarding your personal circumstances. 0294545-00001-00, Ed 08/01/2016, Exp 08/01/2018 The Register | May-June 2018
Master Registered Financial Consultant
MRFC Certification Application Applicant Information
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Please provide your name only on the line above as you want it to appear on your Certificate.
applications submitted to determine if the candidate
is eligible to sit for the MRFC credential and for completeness and
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days, after notice of application approval.
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Commence on anniversary of passing MRFC Exam MRFC Annual Recertification Fee $300
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1. Mail Application with payment to: IARFC P.O. Box 506, Middletown, OH 45042 2. Fax Application to: 513.345.9479 (credit card only)
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Ex. Date. Yes
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I will at all times put my clientâ€™s interest above my own. I will maintain proficiency in my work through continuing education. When fee-based services are involved, I will charge a fair and reasonable fee based on the amount of time and skill required. I will abide by both the spirit and the letter of the laws and regulations applicable to financial planning services. I will give my clients the same service I would give myself in the same circumstances.
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Have you ever been refused a surety bond or other form of employment security? Have you ever been denied or enjoined from selling or dealing in securities or from functioning as an Investment Advisor? Have you ever been arrested, indicted, or convicted for any felony or misdemeanor, except for minor traffic offenses? Have you ever been known personally by any other name, or have you ever conducted financial activities, conducted business or carried brokerage or bank accounts in any other name? Have you ever become insolvent, failed in business or compromised with creditors? If “Yes” – please provide the date name and location of court, disposition, liabilities, and assets.
Have you ever had a license, permit, certificate, registration or membership denied, suspended, revoked or restricted, or have you had an application of such type ever withdrawn for cause?
Have you ever been the subject of any order, judgement, decree or other sanction of a foreign court, foreign exchange, or have you ever been the subject of any action by a foreign or domestic governmental or regulatory agency?
Attestations (Applicants please read carefully) 1. I hereby certify that I have read and understand the foregoing statements and that my responses are true and complete to the best of my knowledge. 2. I hereby apply for the MRFC credential and in consideration of my application, I submit myself to the jurisdiction of the Association and hereby verify that I agree to abide by all the provisions of the By-Laws and regulations of the Association as they are and may be amended. I agree to comply with all such requirements, subject to right of appeal as provided by law. I agree that any decision as to the result of any exam(s) that I may be required to pass or annual Continuing Education (CE) requirements will be accepted by me as final. 3. I further agree that neither the Association nor its officers or employees shall be liable to me for action taken or omitted in official capacity or in the scope of employment, except as otherwise provided in the statutes, Bylaws, or the Association’s regulations. 4. I hereby certify that I have a sound record of business integrity with no suspension or revocation of any professional licenses, and I hereby subscribe to the IARFC Code of Ethics, a copy of which I have read and understand. 5. It is agreed and understood that any material misrepresentation of facts or information given in this or subsequent application or renewal may be cause for immediate revocation of the MRFC credential and all its privileges, without refund of any dues or fees paid. 6. I understand that failure to disclose any regulatory event, including suspensions or revocations, may disqualify me from initially obtaining the MRFC credential or could result in revocation of the credential. 7. As an applicant for registration, I understand and agree that my MRFC credential will not become effective until I have met all the eligibility requirements and had have successfully passed the MRFC exam. 8. I understand that the MRFC credential remains the property of the Master Certification Board, (MCB) and must be destroyed or returned to the MCB should my right to display the credential be suspended or terminated. 9. I understand that the continuation of the MRFC credential requires the successful awarding of forty (40) hours of financial services focused CE credits — of which four (4) hours every two years must be related to Professional Ethics commencing the January of the year following initial acceptance. 10. I understand this application is valid for sixty (60) days from the date of receipt by MCB’s home office and I have ninety (90) days upon application approval to schedule the MRFC exam. 11. I authorize the organization to make available to any federal, state or municipal agency, or any securities or commodities industry self-regulatory organization, any information they may have concerning me or to request confirmation of my status, and I release those organizations, employees and agents, from any and all liability of whatever nature by reason of furnishing such information. 12. I further agree that my contact information contained in this application be divulged to interested parties as part of the member profile on the IARFC website for the benefit of members and the public. 13. I understand that except for my certification status, written authorization by me is required to release my information.
I attest that I have read and understand the above, that the information I have provided complete and accurate to the best of my knowledge and belief, and I further understand that my MRFC certification may be revoked if I provided any false or incomplete information.
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International Association of Registered Financial Consultants 1046 Summit Drive, P.O. Box 506 Middletown, OH 45042-0506 P: 800.532.9060 F: 513.345.9479 E: mrfc@IARFC.org W: IARFC.org
IARFC Ethics Approved Status
Ethics Approved Status means adherence to the IARFC Code of Ethics with a clear record for the past five years. Members are biennially verified through FINRA, State licensing records and internet searches.
Brand Your Ethics Approved Status Set yourself apart from other consultants • Affix your Ethics Approved Seal to your framed RFA®, RFC® or MRFC Certificate • Send an IARFC Ethics Approved media release to your contacts • Order business cards with the Ethics Approved Seal • Place digitized Seal on your website in a prominent position • Mention this program in client newsletters • Order additional Ethics Approved Seals as a visual reminder • Display the IARFC Code of Ethics plaque in office • Put a link to the IARFC Code of Ethics on your website
Visit the store store for these valuable branding tools tools VisitIARFC the IARFC for these valuable branding www.IARFC.org or contact firstname.lastname@example.org www.IARFC.org/Store or 800.532.9060, contact 800.532.9060, email@example.com The Register | November-December 2017
IARFC INTERNATIONAL ASSOCIATION OF REGISTERED FINANCIAL CONSULTANTS
P.O. Box 42506 Middletown, Ohio 45042
IARFC BILTMORE EXHIBITORS
NATIONAL FINANCIAL PLAN COMPETITION Corporate Sponsors
Michael Markey, Jr., MRFC, our newest member of the IARFC Board of Directors, is the owner of Legacy Financial Network located in Kentwood,...
Published on May 15, 2018
Michael Markey, Jr., MRFC, our newest member of the IARFC Board of Directors, is the owner of Legacy Financial Network located in Kentwood,...